A Great Lesson to Learn from Amazon Suspended 80k Affiliates

This is a bad news for amazon affiliates who are living in the these states – California, Colorado, Illinois, North Carolina, Rhode Island and Connecticut. Amazon would no longer be paying them to take part in Amazon’s affiliate marketing program. The reason is the proposed state budget includes a measure that would force Amazon to pay sales tax on any items California consumers buy.

Here is the email that affiliates in above mentioned states received from Amazon shortly after California governor Jerry Brown signed the budget:

Hello,

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,
The Amazon Associates Team

It sadden me is that those who brought these laws into place are probably not witnessing the impact of their decisions on their constituency. I’m not from California, but I am really saddened that individuals that’s trying to make an honest living have to suffer financially because of the decision that’s made by the politicians. I thought those politicians should be encouraging Americans to become financially independent because the ratio of people looking for work compared to the jobs that’s available is ridiculous, but it seems like not.

According to the Amazon Associate’s blog, 80,000 affiliates had their accounts suspended already. From what I understand, Associates can still log on to their accounts and even create links, but they won’t be paid for further business. Also, if an Associate did not make their minimum quota, they lose any revenue earned since the last payment.

I think it’s crazy to do business with a company that will just close your account at the drop of a hat. It maybe better to partner with smaller companies that want to work with you. If your business is completely dependent on the big Google, Ebay, or Amazon, you better reconsider your strategy. You could be out of business tomorrow.

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